How Options Expiration Reshapes Market Structure

The OpEx Cycle

Options expiration isn't a single event — it's a cycle that shapes market behavior throughout each week and month.

The cycle follows a pattern: structural buildup (as OI accumulates and gamma grows) → maximum structure (when gamma is at its peak, usually mid-week before expiration) → structural unwind (as expiration removes OI and gamma from the chain) → structural reset (new levels form based on remaining and newly created positions).

Understanding where you are in this cycle dramatically improves your trading. The same strategy that works during maximum structure (fading moves, selling premium) can fail during the unwind (when moves extend and levels break).

The Gamma Unwind

When a large expiration removes significant open interest, the gamma exposure at those strikes vanishes. Dealers who were hedging those positions close their stock hedges. This is the gamma unwind.

The unwind often creates volatility in the opposite direction of the prevailing structure. If positive gamma was keeping the market range-bound, the unwind removes that stabilizing force. Price is free to move — and often does.

Monthly OpEx (third Friday) is the biggest gamma event. But with the growth of weekly and daily expirations, smaller unwinds happen more frequently. GammaLens shows you exactly how much gamma is expiring at each date, so you can anticipate the magnitude of each unwind.

Trading Around Expiration

Before expiration: structural levels are at their strongest. Gamma is high, walls hold, and mean-reversion strategies perform well. This is the "structural sweet spot."

On expiration day: pinning effects dominate early. Near-the-money strikes with large OI act as powerful magnets. But as the session progresses and options expire, pinning weakens. The final hour can be unpredictable as gamma rapidly decays.

After expiration: the structural landscape has reset. New levels need to be assessed. The first session after a large expiration is often the most informative — it reveals the new structural regime.

The History tool in GammaLens tracks how levels shift around expirations over time, helping you identify patterns in how specific tickers behave through the OpEx cycle.

Monthly vs Weekly vs Daily Expiration Impact

Not all expirations are equal in their structural impact:

Monthly OpEx (third Friday) is the most significant. Standard monthly options carry the most open interest and gamma. The week of monthly OpEx is often the most structurally "rigid" — and the Monday after is often the most volatile.

Weekly expirations (every Friday) carry meaningful but smaller gamma. They create a weekly rhythm of structural buildup and release.

Daily expirations (0DTE) are a newer phenomenon. They create intense intraday structure that resets every day. Their gamma impact is concentrated in a single session, making them critical for day traders but less relevant for swing traders.

In GammaLens, the expiration sidebar shows the gamma contribution of each expiration date, so you can see how much structure is at risk at each upcoming expiry.